Growth In Europes Electronic Security Market At 3 Per Cent
According to i&I, over the last 5 years growth in Europe’s electronic security market has just marginally exceeded 3 per cent. At the same time some of the largest ever electronic security acquisitions have taken place but i&i says security electronics is clearly still a very fragmented business, particularly in the areas of CCTV video and access control where the largest supplier to the European market has a share of little more than 10 per cent and share distribution has changed little in the last 5 years. At the same time, i&i says the business is relatively immature given that penetration of systems differs by a factor of 2.5 across Europe and this has resulted in a wide divergence of growth and business opportunity between countries.These are some of the interesting facts revealed in this, the latest and most detailed multi-client study written on the electronic security systems market in Europe (EU(7)) published by the Proplan Division of i & i limited. The study shows a modest compound growth of 3 per cent over the last 5 years delivering a total system sales of $E5.8 billion in 2006. Access control and CCTV have grown at 6 and 7 per cent respectively, with the highest levels of growth recorded in Spain, Italy and the UK. Sales of intruder alarms, which took the largest share of the market in 2001, fell in all countries with the exception of Spain. Although i&i forecast that this decline will continue, it will be less pronounced, while increased growth in access control and CCTV surveillance will more than compensate to deliver total system sales of $E7 billion in 2011.The primary demand drivers of perceived increases in the levels of crime, unsociable behaviour and terrorism have not changed, but the emphasis has shifted to secondary drivers such as reducing the cost and increasing the effectiveness and productivity of security systems and this is determining who wins the business. i&i says the electronic security industry will not deliver on a standard communications protocol but the demand side, actioned through the CIO’s (Chief Information Officers) is getting IT Standards introduced to get convergence with the business enterprise and at the same time is driving down prices, achieving more robust and interoperable systems through using IT related products. This will undoubtedly bring with it higher levels of growth in the longer term.The report clearly shows much evidence of significant growth in the integration of security management systems and the delivery of holistic business solutions through IT-Convergence. There is much more happening here than the take-up of IT-Convergence in environmental controls and fire detection markets. The study shows that the most attractive business areas defined by vertical market type are retail, education, communication and computer buildings, high tech manufacturing and life sciences. The average margin on sales is around 36 per cent on system business and 38 per cent on product sales and this has remained quite stable over the last 10 years. However, there is variation between the sizes of project, with the small to medium sized projects coming under greater price pressure. Across Europe, replacement and extension business accounts for approximately 40 per cent of the total market and has increased its share over the last 5 years. Without this market sector most companies in the business would not be able to support the high levels of R&D work that are necessary to keep ahead of the game in security electronics.